AUDITED FINANCIAL STATEMENTS FOR FUNDS AND LICENSEES
Pursuant to the Securities and Investment Business Act, 2010 ("SIBA") and the Mutual Funds Regulations, 2010, all British Virgin Islands ("BVI") private, professional and public funds ("Funds") and all BVI investment business licence holders ("Licensees") are required to appoint, and at all times have, an auditor for the purposes of auditing their financial statements.
All Funds and Licensees are required to submit a final copy of their audited financial statements to the BVI Financial Services Commission (the "FSC") within six months of the end of each financial year. Funds and Licensees with a financial year ending on 31 December are therefore required to submit their audited financial statements for the 2013 financial year to the FSC on or before 30 June 2014.
Funds and Licensees could be faced with administrative penalties and/or enforcement action if they fail to meet the deadline.
Funds and Licensees must prepare financial statements for each financial year in accordance with one of the prescribed accounting standards1 or internationally recognised and generally accepted accounting standards equivalent to such prescribed accounting standards.
Exemptions and Extensions
Funds and Licensees which have not appointed an auditor will need to make a written application to the FSC for an exemption from the requirement to appoint an auditor and submission of audited financial statements. Alternatively, Funds and Licensees which are not in a position to file the audited financial statements by the annual filing deadline may apply to the FSC for an extension. The FSC may grant a maximum extension of up to nine months following the end of the relevant financial year. Please speak with your usual Maples and Calder contact or one of the individuals listed above for further details on the exemption or extension process.
Procedure for Submission
Funds and Licensees should submit audited financial statements to the FSC through their appointed authorised representative, Maples Authorised Representative Services (BVI) Limited, via any of their usual Maples and Calder contacts.
Other types of funds that are not registered or recognised under SIBA, for example closed-ended funds domiciled in the BVI, are not required to prepare or submit audited financial statements to the FSC.
ANNUAL RETURNS FOR FUNDS
All Funds are subject to an annual reporting regime under which a mutual fund annual return ("MFAR") must be submitted to the FSC.
Information to be disclosed in the MFAR
Each Fund must report on the following:
- Basic prudential and governance information, which includes information on its registered agent and functionaries.
- Summary financial information for the relevant reporting period, which includes beginning NAV, total subscriptions, total redemptions, net income/net loss, dividends/distributions, ending NAV and year-end gross assets.
Asset allocation details are also required, but there is no need to set out specific details of individual investments. Details of investors do not have to be disclosed in the MFAR.
When do Annual Returns need to be filed?
The reporting period for the MFAR is every calendar year, ending on 31 December. Funds will be required to submit the MFAR within six months of the end of each reporting period, i.e. on or before 30 June.
Purpose of Annual Returns
The FSC intends to use the information filed in the MFAR to measure and develop the BVI funds industry whilst at the same time meeting international reporting standards. We understand that the FSC will not make the MFAR publicly available, but may share information gathered from the MFAR on an aggregate basis.
Filing Procedure for the MFAR
The MFAR must be submitted to the FSC electronically. To complete and submit the MFAR, please click here. If you have not previously filed the MFAR electronically then you will need to register as a new user on the FSC's website and obtain log in details by email.
Please click here for a copy of the FSC's full guidance notes.
(a) The International Financial Reporting Standards, promulgated by the International Accounting Standard Board;
(b) UK GAAP;
(c) US GAAP;
(d) Canadian GAAP; or
(e) Such other recognised international accounting standards as may be approved by the FSC on a case by case basis.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.